# Chinese Yuan Fix 'Encourages Capital Flight': Ex-PBOC Policymaker | Fortune

> Yu Yongding, a former PBOC monetary policy committee member, wrote that the central bank's new yuan fixing mechanism encourages capital flight and has led to gradual depreciation. He argued the fixing prevents true two-way volatility and has drained foreign exchange reserves. The new mechanism sets the midpoint based on the prior day's close and a currency basket.

- Date: 2016-11-22 · published 2016-11-22T12:00:00.000Z
- Category: macro · region China · magnitude low
- Page: https://feedsoft.ai/events/74064-chinese-yuan-fix-encourages-capital-flight-ex-pboc-policymaker-fortune
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

Continued gradual yuan depreciation would keep the dollar-denominated cost of Chinese feed imports elevated. This commentary signals that policy may stay on the same path, which keeps the currency pressure on import demand in place.

## Read by commodity

- USDCNY: bullish ▲

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2022-04-29 | [Globalised yuan complicates Beijing's bid to stem capital flight](https://feedsoft.ai/events/7641-globalised-yuan-complicates-beijing-s-bid-to-stem-capital-flight.md) | +0.4% | +1.7% |
| USDCNY | 2021-06-17 | [China’s PBOC Braces for Weaker Yuan as Fed Plans Tapering - Bloomberg](https://feedsoft.ai/events/7116-china-s-pboc-braces-for-weaker-yuan-as-fed-plans-tapering-bloomberg.md) | +1.2% | +1.0% |
| USDCNY | 2022-05-11 | [How PBOC might respond to China's weakening yuan](https://feedsoft.ai/events/10987-how-pboc-might-respond-to-china-s-weakening-yuan.md) | +0.0% | -0.8% |
| USDCNY | 2020-04-16 | [Chinese Yuan Weakens As PBoC Pumps More Liquidity Into Economy](https://feedsoft.ai/events/53877-chinese-yuan-weakens-as-pboc-pumps-more-liquidity-into-economy.md) | +0.2% | +0.3% |
| USDCNY | 2021-01-29 | [USD/CNY: Yuan drops despite surging Chinese overnight repo rate - Forex Crunch](https://feedsoft.ai/events/49364-usd-cny-yuan-drops-despite-surging-chinese-overnight-repo-rate-forex-crunch.md) | +0.3% | +0.4% |

## Sources

- fortune.com: https://fortune.com/2016/11/22/china-capital-outflow-yuan-forex/

---
Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.